Revlon Reports Q2, Half Year 2013 Financial Results

Posted: July 31, 2013

Revlon, Inc. announced results for the second quarter ended June 30, 2013. As compared to the second quarter 2012, net sales were $350.1 million compared to $357.1 million, a decrease of 2%. Excluding unfavorable foreign currency fluctuations of $6.4 million, second quarter 2013 net sales were essentially unchanged year-over-year. Operating income was $59.1 million compared to $42.8 million, and net income was $24.7 million, or $0.47 per diluted share, compared to $11.1 million, or $0.21 per diluted share.

Commenting on the results, Revlon president and CEO Alan T. Ennis said, “Our net sales in the second quarter of 2013 were essentially unchanged year-over-year as we benefited from the inclusion of our Pure Ice acquisition offset by continued softness in our Almay brand and the negative impact of business conditions in Venezuela. We continue to support our brands at appropriate levels and are pleased with a number of our new product launches in 2013. As always, we remain focused on our strategic goal of driving profitable growth.”

Lower net sales in Venezuela and lower net sales of Almay color cosmetics were offset by higher net sales of SinfulColors color cosmetics and the inclusion of the net sales of Pure Ice. The decrease in net sales of Almay color cosmetics was driven primarily by a reallocation of brand support in the United States from advertising to promotional allowances, which are a deduction in arriving at net sales.

In the United States, net sales in the second quarter of 2013 were $203.9 million, essentially unchanged year-over-year. Higher net sales of SinfulColors color cosmetics and the inclusion of the net sales of Pure Ice were offset by lower net sales of Revlon and Almay color cosmetics.

In Asia Pacific, net sales in the second quarter of 2013 were $54.3 million, a decrease of $1.5 million, or 2.7%, compared to $55.8 million in the same period last year. Excluding the unfavorable impact of foreign currency fluctuations, net sales were essentially unchanged year-over-year. Higher net sales of Revlon color cosmetics in Japan, SinfulColors color cosmetics in Australia, and Revlon ColorSilk hair color in certain distributor territories were offset by lower net sales of Revlon color cosmetics in China and certain distributor territories as well as lower net sales of other beauty care products in Hong Kong.

In Europe, Middle East and Africa, net sales in the second quarter of 2013 were $42.7 million, a decrease of $1.7 million, or 3.8%, compared to $44.4 million in the same period last year. Excluding the unfavorable impact of foreign currency fluctuations, net sales increased $1.6 million, or 3.6%, primarily due to higher net sales of fragrances and SinfulColors color cosmetics in the U.K. and Italy, partially offset by lower net sales of other beauty care products in France.

In Latin America and Canada, net sales in the second quarter of 2013 were $49.2 million, a decrease of $3.8 million, or 7.2%, compared to $53 million in the same period last year. Excluding the unfavorable impact of foreign currency fluctuations, net sales decreased $2.7 million, or 5.1%. The decline in net sales was driven by the negative impact of business conditions in Venezuela, including Venezuela’s currency restrictions, which decreased net sales in the region by $6.3 million. Excluding Venezuela, net sales in the region increased primarily due to higher net sales of Revlon color cosmetics in Argentina, Mexico and certain distributor territories, higher net sales of Revlon ColorSilk hair color across the region and the introduction of Pure Ice in Canada. These increases were partially offset by lower net sales of Almay color cosmetics in Canada. Net sales in Argentina benefited from higher selling prices resulting from market conditions and inflation.

Additionally for the first six months of 2013, net sales were $682 million, compared to net sales of $687.8 million in the first six months of 2012. Excluding unfavorable foreign currency fluctuations of $12.3 million, net sales increased $6.5 million, or approximately 1%, as compared to the first six months of 2012.

In the United States, net sales in the first six months of 2013 were $396.0 million, an increase of $7.4 million, or 1.9%, compared to net sales of $388.6 million in the first six months of 2012.

In Asia Pacific, net sales in the first six months of 2013 were $107.9 million, a decrease of $4.0 million, or 3.6%, compared to $111.9 million in the same period last year. Excluding the unfavorable impact of foreign currency fluctuations, net sales were essentially unchanged year-over-year.

In Europe, Middle East and Africa, net sales in the first six months of 2013 were $83.4 million, a decrease of $6.8 million, or 7.5%, compared to $90.2 million in the same period last year. Excluding the unfavorable impact of foreign currency fluctuations, net sales were essentially unchanged year-over-year.

In Latin America and Canada, net sales in the first six months of 2013 were $94.7 million, a decrease of $2.4 million, or 2.5%, compared to $97.1 million in the same period last year. Excluding the unfavorable impact of foreign currency fluctuations, net sales were essentially unchanged year-over-year.

Operating income was $106.4 million in the first six months of 2013, compared to $87.1 million in the first six months of 2012. The company continues to execute its business strategy of building its strong brands; developing its organizational capability; driving the company to act globally; pursuing growth opportunities; and improving its financial performance.